Meet the debtors who refuse to pay their money owed
Sanders Fabares felt that something was wrong.
Even after years of paying $ 1,000 a month on his student loans and those of his wife, her bank balance hadn’t dropped significantly. They still owed around $ 80,000, compared to the $ 90,000 they originally borrowed.
“I started to understand what we did wrong,” said the 41-year-old Fabares.
His research quickly turned away from his own credit statements and the larger student debt system. A resident of Lakeside, Calif., Read about the millions of late borrowers and how many monthly payments were used just to pay the interest on their debts, which meant their balances didn’t go down either.
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“I remember thinking it wasn’t sustainable,” said Fabares. “We have to rethink this system and look for something else.”
Fabares has now joined the Biden Jubilee 100, a group of 100 borrowers who are no longer paying their debts. The debt collective, calling itself the “Union of Debtors” organized the strike in hopes of pressuring President Joe Biden to cancel the country’s entire outstanding student loan portfolio of $ 1.7 trillion.
“We’ll win what we organize for,” said Thomas Gokey, co-founder of The Debt Collective.
Source: Sanders Faberes
On the campaign trail, Biden said he supports student loan forgiveness of $ 10,000, but he is under increasing pressure from members of his own party, lawyers and borrowers to go further by canceling $ 50,000 per person and do so through action by the executive.
Although Biden has hesitated in the past to cancel student debt without Congress, White House press secretary Jen Psaki suggested earlier this month that the government had not ruled out the possibility. On his first day in office, Biden extended a payment hiatus for federal student loan borrowers that has been in effect from March through September next.
Critics of student loan forgiveness argue that doing so would not boost the economy much, as college graduates tend to be higher-income individuals who would likely redirect their monthly payments towards savings rather than additional expenses. Others say it would be unfair to those who have already paid off their student debt or have never borrowed, sending the message that it is okay for people to drop their debts.
Student borrowers are being held to an unfair, punitive standard, Fabares said.
“Corporations are walking away from debt because of bankruptcies and bailouts,” he said. “But we are trapped in our debt.” (Student loans are difficult, if not impossible, to bankrupt.)
Training shouldn’t cost a quarter of a million dollars.
Student Loan Storm
Proponents say that borrowers struggled well before the public health crisis – with more than one in four borrowers in crime or insolvency – and that the pain has only worsened after nearly a year of record unemployment.
The vast majority – or around 90% – of federal student loan borrowers took advantage of the government’s option to suspend their monthly payments during the coronavirus pandemic, data shows. And in a recent Pew poll, 6 in 10 borrowers said it would be difficult for them to repay their student loans in the coming month.
Proponents also point out that it is people of color who are shouldering the brunt of the student loan crisis, and it is also black and Latin American Americans who have suffered the most from the coronavirus pandemic. An adviser to Senator Elizabeth Warren, D-Mass., Said canceling student debt would make the greatest strides in reducing the racial wealth gap since the civil rights movement.
Jenny Lezan, of Naperville, Illinois, said she was tired of calling people who refer to student loan borrowers – and those who ask for forgiveness – as lazy or irresponsible.
“We are hardworking people who simply did not have the intergenerational wealth that allowed us to go to college without debt,” said Lezan, 35, who also joined the strike.
She was raised on the West Side of Chicago by a single mother who worked as a housekeeper. She never met her father. “My mother believed that going to college would break the cycle of trauma and poverty we were in,” Lezan said.
Source: Jenny Lezan
Lezan eventually attended Benedictine University and the Art Institute of Illinois – Chicago, one of the nonprofit schools that has come under fire for misleading students about programs and career results. She owes more than $ 170,000 in student loans.
A well-paying job was hard to find. Last year she earned $ 28,000 as an associate professor and freelancer. “As a Spaniard and a woman, I face additional obstacles,” she said.
Many are skeptical that a group of people who refuse to pay their loans will lead to major societal changes.
“This is not the first time student loan borrowers have said they are going on a student debt strike and calling for student loan forgiveness,” said Mark Kantrowitz, an expert on higher education. “It didn’t change anything then and it won’t change anything now.”
Critics also point out that borrowers who default on their student loans face permanent financial consequences.
“You might find it difficult to rent an apartment or qualify for new debt, including credit cards, auto loans, and mortgages,” Kantrowitz said. “You might find it difficult to find a job that requires a security clearance or a background check.”
But Rebekah Valorn, another striker who lives in Salem, Oregon, said her student loans had already made those moves impossible.
“I had to put up with the fact that buying real estate is not an option,” said the 35-year-old Valorn. “I had to let go of a lot of my hope for the future.”
When she found out about the strikers, she felt that the movement could be an opportunity for change.
Shortly after Valorn graduated from the University of Oregon with her law degree in 2014, her mother was diagnosed with terminal breast cancer. Valorn moved back to Minnesota to take care of her. During that time, she couldn’t concentrate on studying for the bar exam. She took all the jobs she could find.
Meanwhile, Valorn made payments on her student loan when she could, but she still owes around $ 274,000 today, of which at least $ 40,000 is interest.
Whatever happens in the end, joining the strike made her feel less alone, she said.
“It was transformative to be in this group and know that we don’t have to be ashamed of anything,” said Valorn. “Training shouldn’t cost a quarter of a million dollars.”